SmartFinancial in Knoxville, Tenn., has agreed to buy Sevier County Bancshares in Sevierville, Tenn.
The $3.3 billion-asset SmartFinancial said it will pay $38.2 million in cash and stock for the $424 million-asset parent of Sevier County Bank. The deal, which is expected to close in the third quarter, priced Sevier County Bancshares at 128% of its tangible book value.
Sevier County Bancshares has seven branches, $381 million of deposits and $243 million of loans. One of its branches is in Richmond, Va., and has a six-person commercial banking team.
John Presley, executive chairman of Sevier County Bancshares, will join SmartFinancial’s board.
“We are pleased to partner with Sevier County Bank, which has a multi-generational history within our legacy footprint in east Tennessee and is a company that we have known and admired for years,” Billy Carroll, SmartFinancial’s president and CEO, said in a press release Wednesday.
“Our familiarity with their leadership team and shared market area are what attracted us to this opportunity,” Carroll added. “This merger is reflective of our philosophy of partnering with banks that hold core values similar to our own and have a commitment to serving their local communities.”
SmartFinancial said it expects to cut about 63% of annual noninterest expenses at Sevier County Bancshares, or $7.1 million. The company said it will likely incur $8.7 million in merger-related expenses, including $1.4 million of restructuring expenses.
The deal should be 15% accretive to SmartFinancial’s 2022 earnings per share. It will likely take two to three years for SmartFinancial to earn back an estimated 3.3% dilution to tangible book value.
Alston & Bird advised SmartFinancial. Performance Trust Capital Partners and Baker, Donelson, Bearman, Caldwell & Berkowitz advised Sevier County Bancshares.
